Appendix A to Part 2418 - Waiving Claims Against FLRA Employees for Erroneous Payments
5:3.0.9.6.9.5.53.1.6 : Appendix A
Appendix A to Part 2418 - Waiving Claims Against FLRA Employees for
Erroneous Payments Date: May 1, 2015. Subject: Waiving Claims
Against FLRA Employees for Erroneous Payments. 1. Purpose
This appendix establishes the FLRA's policies and procedures for
waiving claims by the Government against an employee for erroneous
payments of: (1) Pay and allowances (e.g., health and life
insurance) and (2) travel, transportation, and relocation expenses
and allowances.
2. Background
a. 5 U.S.C. 5584 authorizes the waiver of claims by the United
States in whole or in part against an employee arising out of
erroneous payments of pay and allowances, travel, transportation,
and relocation expenses and allowances. A waiver may be considered
when collection of the claim would be against equity and good
conscience and not in the best interest of the United States,
provided that there does not exist, in connection with the claim,
an indication of fraud, misrepresentation, fault, or lack of good
faith on the part of the employee or any other person having an
interest in obtaining a waiver of the claim.
b. The General Accounting Office Act of 1996 (Pub. L. 104-316),
Title I, section 103(d), enacted October 19, 1996, amended 5 U.S.C.
5584 by transferring the authority to waive claims for erroneous
payments exceeding $1,500 from the Comptroller General of the
United States to the Office of Management and Budget (OMB). OMB
subsequently redelegated this waiver authority to the executive
agency that made the erroneous payment. The authority to waive
claims not exceeding $1,500, which was vested in the head of each
agency prior to the enactment of Public Law 104-316, was unaffected
by the Act.
c. 5 U.S.C. 5514 authorizes the head of each agency, upon a
determination that an employee is indebted to the United States for
debts to which the United States is entitled to be repaid at the
time of the determination, to deduct up to 15%, or a greater amount
if agreed to by the employee or a higher deduction has been ordered
by a court under section 124 of Public Law 97-276 (96 Stat. 1195),
from the employee's pay at officially established pay intervals in
order to repay the debt.
3. Delegation
The Executive Director is delegated the authority to waive, in
whole or in part, a claim of the United States against an employee
for an erroneous payment of pay and allowances, travel,
transportation, and relocation expenses and allowances, in
accordance with the limitations and standards in 5 U.S.C. 5584.
4. Responsibilities
The Office of the Executive Director shall:
(1) Promptly notify an employee upon discovery of an erroneous
payment to that employee;
(2) Promptly act to collect the erroneous overpayment, following
established debt-collection policies and procedures;
(3) Establish time frames for employees to request a waiver in
writing and for the Executive Director to review the waiver
request. These time frames must take into consideration the
responsibilities of the United States to take prompt action to
pursue enforced collection on overdue debts, which may arise from
erroneous payments.
(4) Notify employees whose requests for waiver of claims are
denied in whole or in part of the basis for the denial.
(5) Pay a refund when appropriate if a waiver is granted;
(6) Fulfill all labor-relations responsibilities when
implementing the provisions of this appendix; and
(7) Fulfill any other responsibility of the agency imposed by 5
U.S.C. 5584 or other applicable laws and regulations.
Additionally, the Office of the Executive Director may initiate
a waiver application during the processing of a claim under 5 CFR
part 2418.
5. Reporting Requirements
a. The FLRA shall maintain a register of waiver actions. The
register shall cover each fiscal year and be prepared by December
31 of each year for the preceding fiscal year. The register shall
contain the following information:
(1) The total amount waived by the FLRA;
(2) The number and dollar amount of waiver applications granted
in full;
(3) The number and dollar amount of waiver applications granted
in part and denied in part, and the dollar amount of each;
(4) The number and dollar amount of waiver applications denied
in their entirety; and
(5) The number of waiver applications referred to the Executive
Director for initial action.
b. The FLRA shall retain a written record of each waiver action
for 6 years and 3 months. At a minimum, the written record shall
contain:
(1) The FLRA's summary of the events surrounding the erroneous
payment;
(2) Any written comments submitted by the employee from whom
collection is sought;
(3) An account of the waiver action taken and the reasons for
such action; and
(4) Other pertinent information such as any action taken to
refund amounts repaid.
6. Effect of Request for Waiver
A request for a waiver of a claim shall not affect an employee's
opportunity under 5 U.S.C. 5514(a)(2)(D) for a hearing on the
determination of the agency concerning the existence or the amount
of the debt, or the terms of the repayment schedule. A request by
an employee for a hearing under 5 U.S.C. 5514(a)(2)(D) shall not
affect an employee's right to request a waiver of the claim. The
determination whether to waive a claim may be made at the
discretion of the deciding official either before or after a final
decision is rendered pursuant to 5 U.S.C. 5514(a)(2)(D) concerning
the existence or the amount of the debt, or the terms of the
repayment schedule.
7. Guidelines for Determining Requests
a. A request for a waiver shall not be granted if the deciding
official determines there exists, in connection with the claim, an
indication of fraud, misrepresentation, fault, or lack of good
faith on the part of the employee or any other person having an
interest in obtaining a waiver of the claim. There are no
exceptions to this rule for financial hardship or otherwise.
(1) “Fault” exists if, in light of all the circumstances, it is
determined that the employee knew or should have known that an
error existed, but failed to take action to have it corrected.
Fault can derive from an act or a failure to act. Unlike fraud,
fault does not require a deliberate intent to deceive. Whether an
employee should have known about an error in pay is determined from
the perspective of a reasonable person. Pertinent considerations in
finding fault include whether:
(a) The payment resulted from the employee's incorrect, but not
fraudulent, statement that the employee should have known was
incorrect;
(b) The payment resulted from the employee's failure to disclose
material facts that were in the employee's possession and that the
employee should have known to be material; or
(c) The employee accepted a payment, that the employee knew or
should have known to be erroneous.
(2) Every case must be examined in light of its particular
facts. For example, where an employee is promoted to a higher grade
but the step level for the employee's new grade is miscalculated,
it may be appropriate to conclude that there is no fault on the
employee's part because employees are not typically expected to be
aware of and understand the rules regarding determination of step
level upon promotion. On the other hand, a different conclusion as
to fault potentially may be reached if the employee in question is
a personnel specialist or an attorney who concentrates on personnel
law.
b. If the deciding official finds an indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a
waiver of the claim, then the request for a waiver must be
denied.
c. If the deciding official finds no indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a
waiver of the claim, then the employee is not automatically
entitled to a waiver. Before a waiver can be granted, the deciding
official must also determine that collection of the claim against
an employee would be against equity and good conscience and not in
the best interests of the United States. Factors to consider when
determining whether collection of a claim against an employee would
be against equity and good conscience and not in the best interests
of the United States include, but are not limited to:
(1) Whether collection of the claim would cause serious
financial hardship to the employee from whom collection is
sought.
(2) Whether, because of the erroneous payment, the employee
either has relinquished a valuable right or changed positions for
the worse, regardless of the employee's financial
circumstances.
(a) To establish that a valuable right has been relinquished, it
must be shown that the right was, in fact, valuable; that it cannot
be regained; and that the action was based chiefly or solely on
reliance on the overpayment.
(b) To establish that the employee's position has changed for
the worse, it must be shown that the decision would not have been
made but for the overpayment, and that the decision resulted in a
loss.
(c) An example of a “detrimental reliance” would be a decision
to sign a lease for a more expensive apartment based chiefly or
solely upon reliance on an erroneous calculation of salary, and the
funds spent for rent cannot be recovered.
(3) The cost of collecting the claim equals or exceeds the
amount of the claim;
(4) The time elapsed between the erroneous payment and discovery
of the error and notification of the employee;
(5) Whether failure to make restitution would result in unfair
gain to the employee;
(6) Whether recovery of the claim would be unconscionable under
the circumstances.
d. The burden is on the employee to demonstrate that collection
of the claim would be against equity and good conscience and not in
the best interest of the United States.
8. Authorities
a. 5 U.S.C. 5584, “Claims for Overpayment of Pay and Allowances,
and of Travel, Transportation and Relocation Expenses and
Allowances.”
b. 31 U.S.C. 3711, “Collection and Compromise.”
c. 31 U.S.C. 3716, “Administrative Offset.”
d. 31 U.S.C. 3717, “Interest and Penalty on Claims.”
e. 5 CFR part 550, subpart K, “Collection by Offset from
Indebted Government Employees.”
f. 31 CFR part 5, subpart B, “Salary Offset.”
g. Determination with Respect to Transfer of Functions Pursuant
to Public Law 104-316, OMB, December 17, 1996.
9. Cancellation
FLRA Internal Regulation 2790, dated December 29, 1986, is
superseded.